Month: May 2019

Anti-Carbon Credits, Anyone? or, Billionaires Want to Go to Heaven, Too.

Anti-Carbon Credits, Anyone? or, Billionaires Want to Go to Heaven, Too.

I had dinner last evening with my family at my sister’s house. Toward the end of the meal, we got into a spirited discussion about the global threat posed by rising Carbon levels. About half of the folks at the table promptly fled, leaving an interesting demographic ready to continue the debate:

1. The Millennials: my niece, Katie, her boyfriend, Glenn, and my nephew, Kevin,

2. Myself, and

3. Our senior and ever-sage counsel, my Mom.

We batted a few ideas back and forth. What, if anything could be done about rising Carbon levels? I went home with an idea, and chastened by Katie’s admonition that doing something is better than nothing, I decided to write it down.

And so here is a proposal for an investment vehicle to help save the rain forests: Anti-Carbon Credits. Maybe someone has already thought of this, if not, I hope this gets you thinking.

Anti-Carbon Credits

According to Bloomberg Businessweek[1], “Guyana is making money off their rainforests without cutting them down. A $250 million investment from Norway to curb deforestation has paid for, among other things, scientists from Winrock International to assist the Guyana Forestry Commission in developing a system that measures the quantity of carbon stored by the country’s forest.”

Measures is the key word here. If you can measure something, you can assign a monetary value to it, and, and just as importantly, define metrics for ongoing performance.

Perhaps it is is Guyana and Norway’s intent to set an example that will be widely imitated. We already measure the carbon polluting our atmosphere and our oceans. Keeping those levels from rising is a global mission. But in order to impact global carbon levels, rain forest countries must all act locally.

Capitalization, good old cash, can spur local action, and measuring the carbon captured by each rain forest around the globe enables a discrete monetary valuation of the conservation benefit of keeping that rain forest intact.

I’ll call this an “Anti Carbon Credit,” or ACC, for short.

Selling ACC’s could enable rain forest countries to pursue economic strategies that lessen their dependency on logging, with ongoing monitoring, of course, to encourage sustained good behavior.

But who would buy ACC’s at valuations that are sufficiently high to impact a country’s conservation behavior? At first glance, it would seem that ACC’s would have no value, or even a negative value, without clear economic return, and an uncertain impact on long term global carbon levels.

In contrast, “Carbon Credits,” well established investment products that grant the buyer the right to pollute, are designed to enhance Bottom Line profitability. Hence, Carbon Credits have intrinsic value.

Solving for this dilemma is, as they say, beyond my pay grade. Perhaps Double Bottom Line Capitalists like Ray Dalio will figure out a way to productize  ACC’s to sell to cash rich billionaires. [2]

The target market for ACC’s could be defined as:
-Those who care about what people will say about them when they are dead, and/or
-Those who fear for the welfare of their immortal souls – that being complicit in the demise of the planet guarantees them a fast ride to the Bad Place.

Just a thought. Discuss amongst yourselves.

References
[1] https://www.bloomberg.com/news/features/2019-05-16/guyana-is-making-money-off-rainforests-without-cutting-them-down

[2] Double Bottom Line investments produce both good social returns and good economic returns